The volatility of the stock market can create exciting investment opportunities for traders willing to take on a degree of uncertainty in the pursuit of higher profits.
When trading Indices, you’re trading on the performance of stocks without taking physical ownership of an asset - all you’re doing is trading on the direction of the price movements of certain securities. Traders are able to nominate a relatively small sum then apply leverage to gain more exposure to the trade, therefore enhancing the potential for profit. However, anyone considering trading Indices must be aware that losses can also be magnified and, in some cases, exceed account balances.
Due to its flexibility and ability to spread capital further, Index trading is a popular method of diversifying an investment portfolio.